Cambodia’s insurance industry is still small and unknown, but has come a long way, Rath Sa Rath, chief of the insurance office for the Ministry of Economy and Finance, told officials from seven Southeast Asian nations Monday.
Rath Sa Rath’s presentation was part of a seminar, sponsored by the Asian Development Bank Institute and the Organization for Economic Cooperation and Development, on emerging issues on social protection. The seminar ends today.
“We have a long way to go, but I am very proud to see the state of development of the Cambodian insurance industry today compared to 10 years ago, when we didn’t have any,” he said.
From 1964 to 1992 a state-owned monopoly on insurance existed, Rath Sa Rath said. In 1992, a law was adopted allowing private insurance companies to enter the market, which they gradually began to do.
In September, Prime Minister Hun Sen issued a subdecree laying out guidelines and requirements for insurance companies, as well as agents and brokers operating in Cambodia. “It is a new legal framework which allows Cambodia to…manage the industry,” Rath Sa Rath said.
Four insurance companies now operate in Cambodia, all of them foreign-owned. Most insurance customers are foreign investors or businesses. Rath Sa Rath said this is because many Cambodians, especially in rural areas, still don’t understand insurance.
“The understanding of the advantages of insurance among locals is very low, especially low-income [people],” he said, adding that many Cambodians, could benefit from health, life and calamity insurance, workmen’s compensation and pensions.
Rath Sa Rath said the Cambodian government hopes soon to provide life insurance and pensions for all its workers. In addition, his office is collaborating with the Ministry of Social Affairs and Labor to make mandatory workmen’s compensation a provision of the labor law.
According to Rath Sa Rath, early next year third-party liability insurance will be made mandatory for all commercial vehicles.